Svmuu News: Citigroup analysts say the recent sharp correction in the South Korean stock market may be nearing its end, and the Korea Composite Stock Price Index (KOSPI) is expected to rebound in the future. They maintain a target price of 10,000 points, representing an upside potential of more than 50% from current levels.
The South Korean stock market has recently undergone a sharp correction, with the KOSPI falling 28% from its all-time high on June 22 and dropping a further 4.5% on Monday. Citi believes this downturn was primarily driven by profit-taking and technical adjustments—with memory chip companies such as Samsung Electronics and SK Hynix leading the decline—rather than a deterioration in fundamentals. Citi noted that South Korea’s strong economic fundamentals, the AI semiconductor cycle, and a more supportive policy environment could serve as key drivers for a stock market rebound.
Previously, South Korean retail investors had been heavily buying leveraged ETFs related to AI semiconductors. According to data from KB Financial Group, since the listing of single-stock leveraged ETFs on May 27, South Korean retail investors have made cumulative net purchases of approximately 14 trillion won (about $9.4 billion), far exceeding the roughly 2 trillion won in purchases by foreign investors. The recent market pullback has put significant pressure on these leveraged funds. (CNBC)